Australian Workers' Union v Yallourn Energy Pty Ltd

Federal Court of Australia|2000-02-08|Before: Merkel J

Introduction 1 The applicant unions, the Australian Workers' Union ("the AWU"), the Automotive Food Metals Engineering Printing and Kindred Industries Union of Australia ("the AMWU") and the Communications, Electrical, Energy, Information, Postal, Plumbing and Allied Services Union of Australia ("the ETU") have commenced a proceeding in the Court against Yallourn Energy Pty Ltd ("Yallourn Energy") claiming that a proposed action in tort by Yallourn Energy against the applicant unions, their officers and members constitutes a contravention of ss 170MT(2), 170MU(1) and 170NC(1) of the Workplace Relations Act 1996 (Cth) ("the Act"). 2 In their proceeding the applicant unions have applied for the imposition of penalties in respect of the alleged contraventions as well as certain declaratory relief and an injunction restraining Yallourn Energy from threatening to commence, commencing or pursuing any action in tort against the applicant unions, their officers or members in relation to the industrial action taken since 4 January 2000 by the applicant unions' members at the mine and power plant site of Yallourn Energy ("the alleged tortious industrial action"). The applicant unions contend that the alleged tortious industrial action is protected action under s 170ML of the Act with the consequence that, under s 170MT(2), no action lies under any State or Territory law (whether written or unwritten) in respect of that industrial action. 3 The applicant unions have applied to the Court for interlocutory injunctions restraining Yallourn Energy from commencing or pursuing any action in tort in relation to the alleged tortious industrial action. Background 4 The applicant unions (which are registered organisations under the Act) and Yallourn Energy are, together with other unions, parties to and bound by the Yallourn Energy Pty Ltd Enterprise Agreement 1997 ("the Yallourn enterprise agreement"). The Yallourn enterprise agreement was certified on 11 September 1997 and expired on 10 September 1999. Pursuant to s 170LX of the Act the agreement continues in operation after its expiry until it is replaced by another certified agreement or is terminated in accordance with the Act. 5 Since April 1999 extensive negotiations have taken place between, inter alia, the applicant unions and Yallourn Energy in relation to a new agreement to replace the Yallourn enterprise agreement. During the latter part of 1999 it was clear that there were substantial differences between the applicant unions and Yallourn Energy as to the terms of any new enterprise agreement. During that period each of the applicant unions served on Yallourn Energy, and filed in the Industrial Relations Commission ("the IRC"), a notice of initiation of bargaining period pursuant to s 170MI of the Act. The notices stated that the unions intended to try to make an agreement with Yallourn Energy under Div 2 of Pt VIB of the Act and to have the agreement certified under Div 4 of Pt VIB. As a consequence of the notices each of the unions was a "negotiating party" under s 170MI(3) and, by reason of s 170MM(3), a "protected person" in respect of protected industrial action for the purposes of s 170MM. 6 During the bargaining period the unions were entitled to organise or engage in industrial action against Yallourn Energy for the purpose of supporting or advancing claims made in respect of the proposed certified agreement or in response to a lockout by Yallourn Energy of employees whose employment would be subject to the agreement: see s 170ML. Subject to compliance with the relevant provisions of the Act, such industrial action is "protected action". The consequence of this is that no action lies under any law (whether written or unwritten) in force in a State or Territory in respect of the industrial action unless it involves or is likely to involve personal injury, wilful or reckless destruction of or damage to property, or the unlawful taking, keeping or use of property: see s 170MT(2). It is not alleged in the present case that any of the exceptions are applicable to the alleged tortious industrial action taken against Yallourn Energy by members of the applicant unions. 7 On 9 November 1999 Yallourn Energy lodged an application with the IRC under s 170MH for termination of the Yallourn enterprise agreement on the ground that it was not contrary to the public interest to terminate the agreement. Subsequently, each of the applicant unions gave notice of intended industrial action pursuant to s 170MO of the Act. Industrial action is not protected action under s 170ML unless, inter alia, the union (which is a negotiating party during the bargaining period) has given the employer at least three working days written notice under s 170MO of the intention to take the action and the notice states the nature of the intended action and the date upon which it will begin. 8 The AMWU gave notice of intended industrial action pursuant to s 170MO on 24 December 1999. The notice stated that the industrial action that was to commence on 4 January 2000 included certain bans and rolling stoppages at the "Sites" of Yallourn Energy. On 30 December 1999 a notice was given by the ETU in respect of similar action at the Yallourn Mine and the Yallourn Power Station "Sites" of Yallourn Energy. On 4 January 2000 the AWU gave notice of intention to take the ongoing industrial action stipulated in its notice at Yallourn Energy's plant site. The action stipulated included certain bans and limitations or restrictions on the undertaking or performance of work. The relevant members of the applicant unions are primarily employed in maintenance duties at the plant site. 9 Since the giving of the notices the industrial dispute has escalated, with members of the applicant unions engaging initially in bans and rolling stoppages and then an indefinite strike at the plant site of Yallourn Energy. Yallourn Energy responded initially by standing down members of the applicant unions who were not prepared to work as directed. It then gave notice that it proposed to lock out all of its employees at the site for two months from 8 February 2000 to 4 April 2000 but withdrew that notice on 7 February 2000. 10 It is unnecessary to detail all the steps taken by the various parties. Yallourn Energy's response to the notices of intended industrial action was to send a memorandum dated 4 January 2000 to all its employees stating its disappointment at the "new development". Yallourn Energy stated that, whilst its immediate priority was to implement appropriate plans to address the proposed industrial action, it was concerned that as a result of the industrial action the majority of its employees would be unable to carry out their normal duties. Yallourn Energy also stated that it proposed to implement appropriate measures to protect its business, do all it could to secure its future and, in the meantime, "continue to strive for a negotiated settlement". 11 By a notice dated 18 January 2000 Yallourn Energy notified the unions that it would not accept part performance of duties by members. The members were not permitted to enter the premises to resume work until they were prepared to perform all their duties. Although the employees were to be stood down and not paid, they were to continue to be employees of Yallourn Energy. 12 On 21 January 2000 the applicant unions gave further notices under s 170MO to the effect that the industrial action under the earlier notices was to cease as from 25 January 2000, from which time the intended industrial action would be an indefinite strike by their members at the Yallourn Energy plant site. The applicant unions contend that an indefinite strike was commenced by their members on 25 January 2000. 13 The applicant unions and Yallourn Energy each filed affidavits concerning the industrial action taken by members of the applicant unions. The evidence relied upon was understandably very general, in the form of hearsay and stated conclusions rather than the detailed facts upon which the conclusions were based. There was no objection to the admissibility of the evidence, nor was there any cross-examination of the deponents. Plainly, there is some dispute as to the extent to which the industrial action taken by members of the applicant unions fell within the action stipulated in the notices. Ultimately, that will be an issue for trial. For present purposes it is sufficient to say that there are reasonable grounds, on a prima facie basis, for concluding that the industrial action taken by members of the three unions fell within the terms of the various notices given pursuant to s 170MO. On a prima facie basis on the evidence before me, subject to certain legal issues raised by Yallourn Energy as to the validity of the notices, it is likely that, for the most part, the alleged tortious industrial action is "protected action" for the purposes of the immunity granted under s 170MT(2) in respect of that action. 14 Yallourn Energy also responded to the notices of intended industrial action by informing employees on 24 December 1999 that it was changing its usual procedures for approving annual leave and sick leave. The AMWU filed an application in the IRC on 5 January 2000 for orders pursuant to s 127 of the Act to prevent Yallourn Energy from implementing or acting upon the proposed changes to its procedures. Yallourn Energy advised the IRC that it decided not to change its procedures with respect to approving sick leave but did propose to change its procedures in relation to the approval of annual leave. Commissioner Lewin declined to make the orders sought by the union. 15 As a consequence of the industrial action taken by the various parties, Yallourn Energy's plant site effectively ceased functioning as from about 10 January 2000. It appears to be common ground that the financial losses suffered by Yallourn Energy as a result of the closure of its plant will run into many millions of dollars. Further, the closure of the plant has led to serious power shortages in Victoria. 16 On 19 January 2000 Yallourn Energy gave notice to the IRC under s 166A of the Act of its intention to bring an action in tort against the applicant unions "and their officers, members and employees in relation to the bans, rolling stoppages and the failure or refusal of the members who were employees of Yallourn Energy to perform work as required by their contracts of employment". The torts alleged to have been committed involve inducement to breach contract and interference with contractual relations. Section 166A prohibits the bringing of an action in tort against an organisation of employees or its officers or members in relation to conduct by those persons acting in those capacities "in contemplation of furtherance of claims of the subject of an industrial dispute" unless a certificate is granted under the section. Pursuant to s 166A(6) a certificate must be issued by the IRC in the event that (a) it forms the opinion it is not likely to stop the conduct promptly; (b) if substantial injustice would be caused to the person giving the notice if that person were prevented from bringing the action to which the notice relates while the Commission was exercising conciliation powers; or (c) if the Commissioner had not stopped the conduct by the end of 72 hours after the notice was given. 17 Although counsel for Yallourn Energy initially indicated that his client was proposing to apply for a certificate pursuant to s 166A to permit a proceeding against the applicant unions and their members, at the hearing before the IRC on 31 January Yallourn Energy only applied for a certificate in relation to the conduct of the unions and not that of its members. No indication has been given as to whether a certificate under s 166A will be applied for at some later stage against the members of the union. The IRC granted the certificate sought by Yallourn Energy on 1 February, with the consequence that, subject to the issues raised by the applicant unions in the present proceeding, Yallourn Energy is entitled to commence an action in tort in relation to the alleged tortious industrial action. Until the decision of the Court on the interlocutory application, counsel for Yallourn Energy has undertaken not to issue the proposed proceeding without having given the applicant unions 48 hours prior notice of its intention to do so. 18 The applicant unions contend that the proposed proceeding of Yallourn Energy conflicts with or contravenes the Act in three respects, each of which is based on the premise that the proceeding is in respect of protected action. First, under s 170MT(2) it is contended that no action lies in respect of the industrial action as it is protected action. Secondly, the bringing of the proceeding is said to contravene s 170MU(1) on the basis that the employer is altering the position of the employees who are union members to their prejudice, wholly or partly because those employees are engaging, or have engaged, in protected action. Finally, it is contended that both threatening to bring, and bringing the proceeding will contravene s 170NC(1) on the basis that Yallourn Energy has taken or threatened action with intent to coerce its employees to agree to making or varying an enterprise agreement under Div 2 or 3 of Pt VIB of the Act. 19 The applicant unions contend that there is a serious issue to be tried in respect of each of the above matters and that the balance of convenience favours the grant of interlocutory injunctions restraining the commencement of the proceeding threatened by Yallourn Energy. Yallourn Energy contends that there is no serious issue to be tried and that, in any event, the balance of convenience is in favour of refusing the interlocutory relief sought. However, counsel for Yallourn Energy recognised that difficulties might arise if the issue of protected action, which is fundamental to the claims of the applicant unions before the Court and to any right Yallourn Energy has to bring action in tort, is to be determined at different times in different courts. Accordingly, in the event that the Court is satisfied that there is a serious question to be tried he offered to undertake to the Court on behalf of his client that until further order, whilst the applicants' proceeding is on foot in the Federal Court any proceeding in respect of the alleged tortious industrial action will be commenced and pursued by the respondent in the Federal Court. 20 The claim for interlocutory relief by the applicant unions requires determination of whether there is a serious issue to be tried in respect of the three matters raised by the applicant unions and, if so, whether the balance of convenience favours the grant of the relief sought by the applicant unions to restrain the commencement of any proceeding in tort by Yallourn Energy in respect of the alleged tortious industrial action. The legislative scheme 21 Division 8 of Pt VIB of the Act provides that certain industrial action taken during a bargaining period is to be protected action. In substance, Div 8 protects industrial action by unions and employees (s 170ML(2)) and by employers (s 170ML(3)), provided the action is taken for the purpose of supporting or advancing claims made in respect of the proposed agreement or of responding to industrial action taken by the other party to the negotiations in relation to the proposed agreement. 22 Section 170MI(2) provides for written notice to be given of the initiation of the bargaining period which begins, under s 170MK, seven days after the date on which the notice was given. A key section in the division is s 170ML which identifies the industrial action which is protected action and which enjoys the legal immunity conferred under s 170MT. Sections 170ML(2) and 170ML(3), relevantly, provide: "(2) During the bargaining period: (a) an organisation of employees that is a negotiating party; or (b) a member of such an organisation who is employed by the employer; or (c) an officer or employee of such an organisation acting in that capacity; or (d) an employee who is a negotiating party; is entitled, for the purpose of: (e) supporting or advancing claims made in respect of the proposed agreement; or (f) responding to a lockout by the employer of employees whose employment will be subject to the agreement; to organise or engage in industrial action directly against the employer and, if the organisation, member, officer or employee does so, the organising of, or engaging in, that industrial action is protected action. (3) …during the bargaining period, the employer is entitled, for the purpose of: (a) supporting or advancing claims made by the employer in respect of the proposed agreement; or (b) responding to industrial action by any of the employees whose employment will be subject to the agreement; to lock out from their employment all or any of the employees whose employment will be subject to the agreement and, if the employer does so, the lockout is protected action." 23 The written notice of action to be given in respect of protected action "must state the nature of the intended action and the day when it will begin" (s 170MO(5)) and industrial action by members of an organisation of employees that is a negotiating party must be duly authorised (s 170MR). 24 Section 170MT(2) confers immunity from legal action, other than for defamation, in respect of protected action. The sub-section provides: "…no action lies under any law (whether written or unwritten) in force in a State or Territory in respect of any industrial action that is protected action unless the industrial action has involved or is likely to involve: (a) personal injury; or (b) wilful or reckless destruction of, or damage to, property; or (c) the unlawful taking, keeping or use of property." 25 The power of the IRC to make orders under s 127 to stop or prevent industrial action does not apply to protected action (s 170MT(1)). However s 166A, which requires that a certificate be obtained from the IRC by an employer in respect of a proposed action in tort in respect of certain industrial action, does not refer to protected action. 26 The Act also limits the freedom of employers to respond to protected action. Section 170MU(1) provides: "An employer must not: (a) dismiss an employee, injure an employee in his or her employment or alter the position of an employee to the employee's prejudice; or (b) threaten to dismiss an employee, injure an employee in his or her employment or alter the position of an employee to the employee's prejudice; wholly or partly because the employee is proposing to engage, is engaging, or has engaged, in protected action." 27 Section 170NC(1) provides: "A person must not: (a) take or threaten to take any industrial action or other action; or (b) refrain or threaten to refrain from taking any action; with intent to coerce another person to agree, or not to agree, to: (c) making, varying or terminating, or extending the nominal expiry date of, an agreement under Division 2 or 3; or (d) approving any of the things mentioned in paragraph (c)." 28 Section 170NC(2) provides that s 170NC(1) does not apply to protected action. 29 Sections 170ND, 170NE and 170NF provide for penalties of not more than $10,000 to be imposed by an eligible Court in respect of a contravention of penalty provisions, which include ss 170MU and 170NC. An eligible Court is defined in s 170NE as the Federal Court, a District, County or Local Court or a Magistrates' court. Thus, a State Supreme Court is not an eligible court. An eligible court may also grant an injunction requiring a person not to contravene or to cease contravening a penalty provision: s 170NG. A proceeding can be brought in the Court under s 170NG for an injunction notwithstanding that no penalty is being sought: see Independent Education Union of Australia v Canonical Administrators, Barkly Street, Bendigo (1998) 157 ALR 531 at 541-544. 30 The freedom of parties to an industrial dispute to engage in protected industrial action, free of the fetter of legal liability, only exists for protected persons during a bargaining period. However, s 170MW empowers the IRC to suspend or terminate a bargaining period in the circumstances set out in s 170MW(2)-170MW(7). Yallourn Energy has now applied to the Commission to suspend or terminate the bargaining period. 31 The statutory provisions, to which I have referred, reflect a legislative policy that enables and authorises unions, employees and employers to lawfully engage in protected industrial action during a bargaining period notwithstanding that, but for s 170MT(2), the action would otherwise be unlawful and therefore actionable. An incident of that legislative scheme is that protected action can be engaged in by a protected person during a bargaining period free of the fetter of the threats of, or the commencement of, litigation by unions, employees and employers in respect of that action. As North J stated in Australian Paper Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia 81 IR 15 at 18: "The purpose of this statutory scheme is to allow negotiating parties, both employer and employee, maximum freedom consistent with a civilised community to take industrial action in aid of the negotiation of agreements without legal liability for that action." 32 See also Independent Education Union of Australia at 554 per Ryan J. 33 However, it is important to emphasise that under s 170MW the IRC is empowered to limit the freedom of the parties to engage in or to continue to engage in protected action. Under that section the IRC can suspend or terminate the bargaining period. In the present case the IRC was not requested by the parties to act under s 170MW until Yallourn Energy made its application under the section on 7 February 2000. Protected Action 34 Earlier in these reasons I indicated that I was satisfied that there are reasonable grounds, on a prima facie basis, for concluding that the industrial action taken by members of the three unions fell within the terms of the notices given pursuant to s 170MO. A number of submissions were made by Yallourn Energy to the effect that the notices were invalid. In particular, it was contended that, although the notices given in relation to the industrial action taken prior to 25 January 2000 referred in general terms to certain bans and rollings strikes that were intended to occur at the Yallourn Energy mine and power plant, they failed to state the nature of the intended action and the day when it would begin in the manner required by s 170MO(5). 35 The requirements of s 170MO(5) were considered by a Full Court in Davids Distribution Pty Ltd v National Union of Workers (1999) 165 ALR 550. Wilcox and Cooper JJ observed (at 578) that the sub-section was designed: "…to ensure that industrial disputants who are to become affected by protected action, in relation to which their usual legal rights are significantly diminished, are at least able to take appropriate defensive action." 36 I would respectfully add that, as legal immunity is conferred on protected industrial action, it is of obvious importance that the nature of the proposed action be specified accurately, as a failure to do so will be likely to lead to uncertainty and litigation as to whether the action taken subsequent to the notice is protected under the Act. In respect of the requirement for specificity their Honours concluded (at 578): "It will be apparent we think it necessary, and sufficient, for parties to describe the intended action in ordinary industrial English; for example, 'an indefinite strike of all employees', 'a lockout of all employees employed in the AB fabrication plant', 'a ban on overtime', 'a ban of the use of MN equipment', 'rolling stoppages throughout the mine', 'a ban on the servicing of delivery vehicles'. If we are correct in this approach, it follows that a notice that refers only to 'bans and rolling stoppages', without any indication of the nature of the bans or the location of the rolling stoppages, does not adequately disclose 'the nature of the intended action'." 37 Although there is some substance in the criticism made as to the terms of the notices given by the three unions in respect of the industrial action taken prior to 25 January 2000, the notices accord more with the notices of intended action which their Honours found sufficient, rather than the very general form of notice which their Honours said does not adequately disclose the nature of the intended action. I am satisfied, on a prima facie basis, that there are reasonable grounds for concluding that the notices in question comply with s 170MO(5). 38 Further, the notice of an indefinite strike which was to commence on 25 January is expressed in the terms which were found by Wilcox and Cooper JJ in Davids Distribution to comply with s 170MO(5). 39 A number of other contentions were put forward by Yallourn Energy as to why the action was not protected. For example, the AMWU gave a notice on 27 January 2000 referring to certain bans that were to occur if the negotiations were not successful. It appears to be a common ground that the notice is invalid. In any event it is not suggested that any industrial action was taken in reliance on the notice. However, Yallourn Energy contended that the notice, which was inconsistent with the earlier notice given by the same union in respect of an indefinite strike, implicitly notified the employer that the indefinite strike action had ceased. Whilst the contention is arguable, I have some doubt as to whether the notice, which appears to be plainly misconceived, would have been regarded by any of the parties as constituting a notice terminating the previous notice of an indefinite strike. 40 Counsel for Yallourn Energy also contended that, if its contention that any of the industrial action taken by a union or its members was not protected was accepted, that had the consequence of the action of other unions, engaged in concert with that union, no longer being protected. Reliance was placed on s 170MM, which provides that an action is not protected action if it is engaged in in concert with a person or organisation that is not a protected person. There is no substance in the contention of Yallourn Energy, as it is plain from the definitions in s 170MM(3) that protected persons are, relevantly, organisations that are negotiating parties and members or employees of those parties. Counsel for Yallourn Energy was not able to point to any reason why the applicant unions and their members were not negotiating parties as defined under s 170MI(3). 41 It is unnecessary for present purposes to deal with all of the contentions put forward by counsel for Yallourn Energy concerning why the industrial action taken by the three applicant unions and their members was not protected action. Even if it is ultimately held that some aspects of the action may not have been protected, I am satisfied, on a prima facie basis, that the preferable view on the evidence before me is that the major part of the industrial action taken by the three applicant union members appears to be protected action. That is a significant conclusion, as the action in tort is threatened in respect of all of the industrial action taken by the applicant unions and their members since 4 January 2000. A serious issue to be tried (a) Section 170MT(2) 42 Section 170MT(2) provides that no action lies under any law in force in a state or territory in respect of any industrial action that is protected action, other than in circumstances set out in the sub-section which are not presently relevant. Accordingly, there is a prima facie case that the applicant unions and their members are entitled to the immunity conferred by the section, at least in respect of the major part of the industrial action taken since 4 January 2000. However, it does not follow that, by reason of s 170MT(2), they are entitled to an injunction to restrain the proposed proceeding. 43 Section 170MT is not expressed in terms which prohibit the bringing of an action in respect of protected action, nor is it a penalty provision which can give rise to the remedies provided for under Div 10 of Pt IVB.

44 The meaning of a similar statutory provision was considered by a Full Court in the State of New South Wales v McMullin (1998) 153 ALR 473. That case concerned s 31(1) of the Agricultural and Veterinary Chemicals (New South Wales) Act 1994 (NSW) which provided that "[N]o action, suit or other proceeding for damages lies against the State…for any loss or injury directly or indirectly suffered as a result of" certain circumstances set out in the sub-section. Beaumont and O'Loughlin JJ at 476-477 agreed with the primary judge, Wilcox J, who, relying upon Georgiadis v Australian and Overseas Telecommunications Corp (1994) 179 CLR 297 at 306, 310, 314 and 322 (which related to a similar statutory provision), concluded that s 31(1) operated to extinguish rights of action rather than merely barring certain remedies. Moore J (at 486) regarded s 31(1) as meaning that a person was precluded from bringing an action, suit or other proceeding in the circumstances prescribed.

45 In Minister for Youth and Community Services v Health and Research Employees Association of Australia NSW Branch (1987) 10 NSWLR 543 the majority in the Court of Appeal considered that a different, but similarly expressed, provision provided a defence to a claim rather than deprived the Court of jurisdiction in respect of such a claim: see Kirby P at 549-550 and Priestley JA at 552. Kirby P considered that the sub-section did not extinguish the cause of action. However Priestley JA considered that, as s 158(3) conferred power on the court to stay a proceeding satisfying the preconditions set out in the section, the court had jurisdiction.

46 What is clear from the cases is that whether such provisions are substantive, in that they prevent the bringing of an action or extinguish the cause of action, and not merely procedural, in that they provide a defence to an action that may properly be brought, depends upon a consideration of the terms of the particular statutory provision and its purpose.

47 In the present case it is consistent with the terms of s 170MT(2), and its purpose, to construe it as providing that, subject to the exceptions, no action lies in respect of protected action falling within the terms of the section as the cause of action said to found the action has been extinguished. The legal immunity granted in respect of protected action is granted for the purpose, inter alia, of ensuring that such action is not fettered by the threat, or the commencement, of legal proceedings save in the exceptional circumstances set out in the section. Thus, it is consistent with the terms of the section and its purpose to construe it as a substantive provision operating as a bar to action rather than only as a defence that might be waived.

48 However, the bringing of such an action is not prohibited as such. Plainly, where there is a genuine issue as to whether action is protected, then a legal proceeding can properly be brought so as to enable that issue to be determined. In that sense the extinguishment of the cause of action does not prevent a court from exercising jurisdiction in a matter concerning protected action in order to determine whether the cause of action is extinguished: see Minister for Youth and Community Services at 552.

49 Counsel for Yallourn Energy relied on s 166A. He contended that the failure of the legislature to provide that no certificate pursuant to s 166A shall be granted in respect of protected action indicates a legislative intent that an action in tort commenced pursuant to such a certificate could properly be brought, notwithstanding that it was in respect of protected action. Section 166A does not authorise the bringing of an action. Rather, it prohibits an action in tort without a certificate in the circumstances there set out. Whether action is protected does not appear to be a criterion required or even permitted to be considered by the IRC: see s 166A(6). The unions contended that, as the section is concerned with an "action in tort" it cannot apply to protected action as, upon the cause of action being extinguished, the proposed action is not an "action in tort".

50 I do not need to resolve these contentions as s 166A throws little light on the proper construction of s 170MT(2). Section 166A is a fetter on, rather than an authorisation for, the bringing of action and is not concerned with protected action. Accordingly, the granting of a certificate cannot authorise the bringing of an action which does not lie under s 170MT(2).

51 The more difficult issue relates to the Court's jurisdiction to grant an injunction to prevent the bringing of a proceeding in respect of protected action. There are instances where a court has stated its preparedness to grant an injunction to prevent the bringing of an action where there is no liability on the part of the party applying for the injunction to the party proposing to bring the action. Lord Diplock in British Airways v Laker Airways (1985) AC 58 at 81, discussed certain circumstances justifying an injunction to restrain the commencement or prosecution of proceedings in a foreign forum. The circumstances that can support the grant of such an injunction include the plaintiff being entitled under English law to a legal or equitable right not to be sued in that foreign court by that person upon the cause of action that is the subject of the proceeding. His Lordship said (at 81):

"A right not to be sued upon a particular cause of action in a particular foreign court by the person against whom the injunction is sought may be contractual in origin. A common example of this is an exclusive jurisdiction clause in a contract. Furthermore, if under English law a defence would be available to the injunction-seeker, that defence may be given anticipatory effect as a right not to be sued that is enforceable by injunction in an action for a declaration of non-liability." 52 An example of a legal right not to be sued arose in Apple Corps Limited v Apple Computer Inc [1992] RPC 70 at 79 where Hoffman J explained the basis for granting an interlocutory injunction restraining the bringing of trade mark proceedings in breach of agreement: "My conclusion is that there are serious and difficult questions to be determined at the trial; that if, pending trial, the defendants are allowed to push on with their foreign trade mark proceedings, the plaintiffs may suffer harm not easy capable of being compensatable in money; and that if the defendants were held up from prosecuting these proceedings for nine or 10 months until after trial they would suffer no clearly discernible prejudice. In those circumstances, I think that prima facie the injunction should be granted. Is this conclusion affected by the need for caution in enjoining foreign proceedings? The reason for such caution is because, although the order operates in personam against the particular defendant, it is indirectly an interference with the foreign court. That reason is particularly strong in a case in which the English jurisdiction is preferred on the ground that England is the natural forum and the foreign court is conversely being rejected on the ground of its unsuitability as a forum. But in a case like this in which a party has expressly contracted not to sue, the argument that the order merely operates in personam is at its strongest. It involves no finding whatever about the suitability of the foreign forum but merely the universal principle that until some good contrary reason has been shown, men should be held to their bargains." 53 As was observed in CSR Limited v Cigna Insurance Australia Limited [1997] 189 CLR 345 at 392 the inherent power to grant anti-suit injunctions is not confined and is not to be restricted to defined and closed categories. 54 An early example of an anti-suit injunction can be found in the well established jurisdiction of courts to restrain the presentation of winding up petitions on the ground of inability to pay its debts where there is a genuine dispute as to the indebtedness or as to the standing of the applicant to bring the petition as well as where the petition is being presented for an improper motive: In re A Company [1894] 2 Ch 349, Cercle Restaurant Castiglione Company v Lavery [1881] 18 Ch.D 555, Niger Merchant's Co v Copper [1881] 18 Ch.D 557(n), Charles Forte Investments v Amanda (1963) 2 All ER 940; Fortuna Holdings Pty Ltd v Deputy Federal Commissioner of Taxation (1978) VR 83 and Mann v Goldstein (1968) 1 WLR 1091. One ground for the exercise of the jurisdiction to enjoin the presentation or advertisement of the petition is that it is an abuse of process to bring the proceeding to coerce the company to pay a debt under threat of a winding up proceeding when it is known that the debt is genuinely in dispute: see McPherson, The Law of Company Liquidation (4th ed) (1999) at [88] to [91]. The jurisdiction to grant an interlocutory injunction was exercised, particularly where the bringing of the proceeding may likely, of itself, cause harm. 55 As can be seen from the foregoing discussion a court may exercise its jurisdiction to prevent the bringing of a proceeding as relief sought in a suit for a declaration of non-liability or where under domestic law the proceeding is not sustainable or the bringing of the proceeding is an abuse of process or for an ulterior purpose. Such circumstances are analogous to where legal action is threatened in respect of protected action. Under s 170MT(2) no such action is to lie as the cause of action is extinguished. Further s 170NC seeks, inter alia, to prevent action that is coercive in the circumstances there set out. 56 In my view an anti-suit injunction can, properly, be sought in respect of protected action in a suit for a declaration of non-liability. The main issue that will genuinely be in dispute between the parties in such a suit will be whether the action in question is protected under the Act. In circumstances where the action has occurred, or is occurring, the proceeding for a declaration could not be said to be "redolent of an advisory opinion": see CEPU v Telstra Corp Ltd (1998) 85 IR 318 at 320 per Ryan J; cf Telstra Corporation v Australian Telecommunications Authority (1995) 133 ALR 417 at 425 per Lockhart J. 57 As I have found, on a prima facie basis, that there are reasonable grounds for concluding that the proposed action in tort is likely to be in respect of protected action, there is plainly a serious issue to be tried on the question of whether an injunction should be granted, in reliance on s 170MT, to restrain the bringing of that proceeding. The authorities to which I have referred provide strong analogical support for the exercise of the Court's jurisdiction in an appropriate case. 58 In the joint judgment in CSR Limited (at 398) their Honours said of interlocutory relief in respect of an anti-suit injunction where the domestic forum was not a "clearly inappropriate forum" and where it may not be expedient to require an applicant to seek a stay of or dismissal of or the foreign proceeding: "…the court must proceed in accordance with the practice which ordinarily applies with respect to interlocutory relief. In other words, it must then determine whether there is a serious issue to be tried and, if so, whether the balance of convenience favours the grant of an interlocutory injunction."

(b) Section 170MU 59 Section 170MU prohibits an employer from threatening to alter or altering "the position of an employee to the employee's prejudice" wholly or partly because the employee is proposing to engage or engaging in protected action. Under Div 10 the section is a penalty provision and an injunction can be granted under s 170NG to restrain a contravention of the section. Thus, if the threat to bring a proceeding or the bringing of a proceeding is in contravention of the section an anti suit injunction against a party to the proposed proceeding or the proceeding could be granted by an eligible court. 60 The real issue between the parties is whether the threat to bring action in tort or the bringing of the action is an alteration of "the position of an employee to the employee's prejudice". 61 Recently, in Maritime Union of Australia v Geraldton Port Authority (1999) 165 ALR 67 at 100-102 RD Nicholson J considered a number of authorities concerning the meaning of prejudicial alteration "of position" which arises under s 298K(1), as well as s 170MU. Although the words appear to have been accepted as referring to all attributes and incidents of a person's employment, it is less clear whether it extends to circumstances that arise out of employment but do not alter the position of the employee as an employee: see for example Kimpton v Minister for Education of Victoria (1996) 65 IR 317 at 319 per North J. 62 However, in Patrick Stevedores v MUA (1998) 195 CLR 1 at 17-18, Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ referred to the same words in s 298K(1)(c) as: "…a broad additional category which covers not only legal injury but any adverse affection of, or deterioration in, the advantages enjoyed by the employee before the conduct in question." 63 Thus, it appears that the words in question embrace a significantly broader set of circumstances than compensable injury of an employee in his or her employment (see ss 298K(1)(b) and 170MU(1)(a)). 64 In the present case Yallourn Energy has threatened to bring action in tort in respect of what I have found, on a prima facie basis, to be protected action. Although a certificate was only obtained against the applicant unions under s 166A the threat of action in tort against members of the union who are employees of Yallourn Energy has not been withdrawn. All that can be said is that such an action is less imminent than the proposed action against the applicant unions. 65 The bringing of the threatened proceeding against the employees will not alter their position in relation to their employment. However, the following factors might support the conclusion that the "position" of the employees will alter to their prejudice, in the sense discussed in Patrick Stevedores, by the bringing of the proceeding: · the proceeding will place the employer in the position of plaintiff for injunctive relief and damages against the employees as defendants; · the proceeding relates to conduct of the employees undertaken in relation to their employment, which is alleged by the employer to be unlawful and by the employees to be lawful; · any step in the proceeding, including its commencement, exposes each party to potential legal liability for the costs of the other party; · as a result of the commencement of the proceeding, the employees are exposed to a possible legal liability to their employer for injunctive relief and a judgment for very substantial damages; · the proceeding concerns conduct engaged in by the employees against the employer to advance claims in relation to an enterprise agreement proposed by the employees and their unions, concerning the terms and conditions of their employment. 66 In Commonwealth v Verwayen (1990) 170 CLR 394 at 483-484 Gaudron J discussed the manner in which a legal proceeding can alter the pre-existing relationship between two persons. Her Honour said (at 484) that once persons became parties to a proceeding they have "entered a new relationship, namely parties to a proceeding which is in the course of adjudication". Examples of some of the consequences of that relationship are discussed by her Honour at 482-484, by Deane J at 447 and Dawson J at 462. 67 In light of the authorities to which I have referred, and having regard to the width of the expression "alter the position of the employee to the prejudice of the employee", I am satisfied that there is a serious issue to be tried under s 170MU in respect of the action in tort threatened against the employees' industrial action. 68 The applicant's claim that the action threatened against the applicant unions is action which "alters the position of the employees" is more difficult to sustain. If that were the only action threatened then I doubt that it would raise a serious issue to be tried under s 170MU or, put another way, the claim, of itself, would not be of sufficient strength to justify the interlocutory relief sought. The proceeding might plainly be prejudicial to the employees in that they may lose the assistance, support and advice of the applicant unions concerning the industrial action they might take, but it is difficult to accept that such action "alters the position" of the employees. However, the applicant unions are also relying on ss 170MT(2) and 170NC for their claim to injunctive relief. (c) Section 170NC 69 The section is cast in wide terms. Plainly, the commencement of a proceeding with the requisite intent is capable of constituting "action" for the purposes of the section. 70 The major contention of Yallourn Energy is that there is no evidence to support the case of intent put by the applicant unions. In a different context Brennan J in Williams v Spautz (1992) 174 CLR 509 at 535 stated that intention relates to the result the moving party desires to obtain by commencing or maintaining a proceeding. 71 The question is whether it is open to the Court to infer from the evidence that there is a serious issue to be tried, being that the intent of Yallourn Energy in threatening and commencing the proceeding is to coerce the agreement or approval of the employees, and their union, to the terms of the enterprise agreement proposed by Yallourn Energy. 72 The issue of establishing corporate intent is often fraught with difficulty: see Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563 at 582-583 per Brennan, Deane, Gaudron and McHugh JJ. Their Honours cited with approval the following observation of Bright J in Brambles Holdings Ltd v Carey (1976) 15 SASR 270 at 279: "Always, when beliefs or opinions or states of mind are attributed to a company it is necessary to specify some person or persons so closely and relevantly connected with the company that the state of mind of that person or those persons can be treated as being identified with the company so that their state of mind can be treated as being the state of mind of the company. This process is often necessary in cases in which companies are charged with offences such as conspiracy to defraud." 73 There is a degree of unreality about the submission of counsel for Yallourn Energy that the threatened proceeding is extraneous to and is unconnected with the employer's bargaining position in relation to the new enterprise agreement. Earlier in these reasons I outlined the steps taken by the various parties in the course of the present dispute. In my view each step and counter step by the parties in the current dispute appears to be intended to advance their respective bargaining positions in relation to the new enterprise agreement. Whilst there will be additional reasons for particular conduct to be engaged in during the escalation of the dispute, each step appears to be integrally related to each party's position in the bargaining process. Thus, whilst a reason for the proposed proceeding might be to recover loss, I would infer from the limited evidence before me that, on a prima facie basis, the proposed proceeding is another step to assist the position of Yallourn Energy in the bargaining process. 74 A number of factors warrant such an inference: · a proceeding in tort for substantial damages and interlocutory relief is likely to have an intimidatory or coercive effect on the unions and the employees; · that effect (which is deposed to on behalf of the applicant unions) is likely to assist the employer in its bargaining position in relation to the new enterprise agreement; · the losses claimed will run into many millions of dollars, but there is no evidence that Yallourn Energy has any concerns about, or information in relation to, the financial capacity of the unions or the employees to satisfy any judgment for damages; · without evidence to the contrary I would infer that the litigation would be likely to be a significant issue arising in the negotiations for the new agreement; · the proceeding was threatened, and continues to be threatened, against employees but, without any reason being proffered to the Court, the certificate under s 166A was only applied for against the unions; that conduct is consistent with an inference that the threatened legal action in tort against the employees might be intended to be coercive; · notwithstanding that there are reasonable grounds for concluding that, at the least, significant parts of the employees' industrial action is protected action, no endeavour has been made by Yallourn Energy not to commence a proceeding in respect of that action; · if Yallourn Energy's primary objective was only to avoid losses in respect of unprotected action I would have expected it to have applied for orders of the IRC under s 127 (which can be made if the action is not protected: see National Workforce Pty Ltd v Australian Manufacturing Workers' Union (1998) 3 VR 265 at 277-278) and for the termination of the bargaining period under s 170MW earlier than on 7 February 2000. 75 Mr Smith, the production director of Yallourn Energy, deposed that the sole reason for the threatened proceeding against the unions and the employees was to place Yallourn Energy "in a position" to recover its significant losses. Although Mr Smith was not cross-examined his evidence, which is to be given due weight, must be considered in the context of all of the facts, including those set out above. I have no information as to the deponent's role or place in the decision making process, or his access to or knowledge of the intent of those responsible for making the decision to threaten or commence the proceeding. Indeed his affidavit does not explain the basis for his statement. 76 In all the circumstances I am satisfied that there is a serious issue to be tried under s 170NC. Balance of Convenience 77 Yallourn Energy has not put forward any evidence as to how it may be disadvantaged or inconvenienced if it is enjoined, until trial or further order, from commencing its proceeding in respect of industrial action during the bargaining period. As was pointed out by counsel for the applicant unions, what is being sought on an interlocutory basis is deferral, rather than denial, of any right to commence a proceeding. Further, any injunction would be supported by the usual undertaking as to damages which would cover loss arising from the deferral. However, I would infer that the employer's ability to apply for interlocutory relief and to seek to recover damages might assist in securing the return of its employees to work and the re-opening of its plant. On the other hand, the commencement of the proceeding and the pursuit of interlocutory relief, by being able to secure those consequences, has the propensity to undermine the protection intended by the Act not to fetter the bargaining process by such litigation in respect of protected action. That fetter is said by the applicant unions to constitute irreparable harm against which they ought to be protected. 78 Woodward J, (with whom Smithers and Sweeney JJ agreed) in Bullock v Federated Furnishing Trades Society of Australasia (1985) 5 FCR 464 at 472, said that the serious issue to be tried and balance of convenience: "…need not be considered in isolation from each other. Thus an apparently strong claim may lead a court more readily to grant an injunction when the balance of convenience is fairly even. A more doubtful claim (which nevertheless raises 'a serious question to be tried') may still attract interlocutory relief if there is a marked balance of convenience in favour of it." 79 In a case such as the present the observation has a special applicability in that the stronger the case that the action the subject of the proposed litigation is protected action, the more harmful and undermining that litigation is likely to be to the integrity intended to be given by the Act to the industrial bargaining process and the industrial action taken to support it. In such circumstances the case of the unions and of the employees of irreparable harm becomes a stronger one, as they are more likely to be irreparably harmed in the bargaining process by being exposed to the intimidatory and coercive effects of the litigation. The corollary also applies; if a union's case of protected action is a weak one, the court will be more inclined to permit the employer to pursue its claims in tort, contract or otherwise. 80 In my view, for the reasons set out above, the present case falls within the former rather than the latter category and, but for the cumulative effect of three factors relevant to the discretion of the court, I would have granted the anti-suit injunction sought by the applicant unions. The three factors are the applicant unions' claim for the imposition of penalties; the proceeding that is imminent is against the unions and not the employees; and the undertaking offered to the Court by Yallourn Energy to commence and prosecute its proceeding in the Federal Court. The undertaking will have the consequence of ensuring that the "matter", being the litigious controversy between the unions, the employees and their employer in relation to whether the industrial action is protected action, can be determined contemporaneously thereby minimising the risks of injustice, inconsistent outcomes, harm to the integrity of the judicial process and oppression. 81 I regard the application of the applicant unions for the imposition of penalties under Div 10 as significant. As explained above, the scheme of the Act is for protected action of employers and employees to be unfettered by litigation or litigious claims by or against the negotiating parties. An exception that is not inconsistent with that scheme is an anti-suit action that is intended to secure the integrity of the bargaining process by ensuring that it remains unfettered by litigation that can advance the industrial position of either side. Thus, a proceeding for declaratory relief concerning protected action and an anti-suit injunction to prevent a proceeding in respect of such action is consistent with the scheme. 82 During a bargaining period a proceeding by an employer in tort in respect of industrial action alleged by the union to be protected action or a proceeding by a union to impose penalties on an employer under ss 170MU and 170MC in respect of the action, even if ultimately found to have been properly brought, will be likely to affect the parties respective bargaining positions. Whilst the penalties under Div 10 may not be substantial, I regard it as anomalous for the applicant unions to contend that they were entitled to bring a proceeding to impose a penalty based upon their view that the relevant action is protected but that the employer is not to be entitled to bring an action in tort based upon its view that the action is not protected. In my view the anomaly is a factor relevant to the Court's discretion in determining whether to grant interlocutory relief. During the course of the application counsel for the applicant unions suggested that the penalty proceeding might be discontinued; in my view what is relevant is that the unions elected to bring and have brought the penalty proceeding. 83 In addition, the employer's undertaking only to bring the action in the Federal Court ensures that the Federal Court, as an eligible court, will be well placed to ensure that both proceedings are prosecuted and resolved in a manner that is just and which accords with the policy of the Act. If I were in doubt as to the jurisdiction of the Court to deal with the proposed action in tort (which arises under the common law) then I would have some doubt as to the appropriateness of the Court accepting the undertaking. However, recent decisions leave little doubt that the outcome of the applicant unions' claims in reliance on the Act and Yallourn Energy's claims under the common law are integrally bound with the issue of whether the industrial action of the unions and their members is protected action. 84 Thus, the claims form part of one justiciable controversy in respect of which the Court has jurisdiction and power to grant the relief sought by both parties: see Transport Workers Union v Lee (1998) 84 FCR 60 at 66-67. It is well established that the form the proceeding takes is not the critical issue as the Court derives its jurisdiction in the proceeding by reason of the underlying justiciable controversy sought to be resolved by the proceeding: see Fencott v Muller (1983) 152 CLR 570 at 603 and Hooper v Kirella Pty Ltd (1999) 167 ALR 358 at 368-371. 85 In a situation where the Court was minded to refuse an anti-suit injunction but no undertaking of the kind proffered by Yallourn Energy was forthcoming, the Court would then have to consider whether parts of the same matter should be permitted to proceed in different courts (see Lee at 68-69) or only in the Federal Court (see Pegasus Leasing v Cadoroll Pty Ltd (1996) 59 FCR 152 at 158-160 and CSR Ltd v Cigna at 399). However, that issue does not arise in the present case. 86 The third, but less significant, factor is that the proceeding that is imminent is against the applicant unions and not their members who are employees of Yallourn Energy. Thus, any intimidatory, coercive or harmful effects of the bringing of the proceeding are unlikely to be as substantial as they might be if the proceeding is also commenced by Yallourn Energy against its employees. Conclusion 87 Accordingly, upon the giving of the undertaking of Counsel for Yallourn Energy that until further order, while the applicant unions' application is prosecuted in the Court, Yallourn Energy will commence and prosecute any action in tort, in respect of industrial action engaged in by members of the applicant unions which is the subject of the s 166A Certificate issued by the IRC, in the Federal Court I propose to dismiss the application of the applicant unions for interlocutory relief, but reserve liberty to apply in respect of any other threatened proceeding in respect of the alleged tortious industrial action. In all the circumstances it is appropriate to reserve costs. I certify that the preceding eighty-seven (87) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel.

Associate: Dated: 8 February 2000 Counsel for the Applicant: Mr H Borenstein

Solicitor for the Applicant: Maurice Blackburn Cashman

Date of Hearing: 28 and 31 January and 3 February 2000

Workplace Relations Act 1996(Cth)

Workplace Relations Act 1966(Cth)

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Judgment (14 paragraphs)

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